An agent-based model of innovation diffusion: network structure and coexistence under different information regimes
The paper analyzes how the structure of social networks affects innovation diffusion and competition under different information regimes. Diffusion is modeled as the result of idiosyncratic adoption thresholds, local network effects and information diffusion (broadcasting and demonstration effect from previous adopters). A high social cohesion decreases the probability of one innovation cornering the market. Nonetheless, with imperfect information, in small-world networks the higher speed of diffusion produced by the low average distance increases this probability. A low social cohesion also increases the probability of falling into traps of under-adoption. However, such probability is significantly lower with imperfect information, because such regime is characterized by higher levels of market concentrations and this reduces the frictions due to the coexistence of non-compatible product innovations. Copyright Springer-Verlag 2012
Volume (Year): 7 (2012)
Issue (Month): 2 (October)
|Contact details of provider:|| Web page: http://www.springer.com/economics/economic+theory/journal/11403|
|Order Information:||Web: http://link.springer.de/orders.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cowan, Robin & Jonard, Nicolas, 2004.
"Network structure and the diffusion of knowledge,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 28(8), pages 1557-1575, June.
- A. Banerji & Bhaskar Dutta, 2008.
"Local network externalities and market segmentation,"
Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers
08-13, Indian Statistical Institute, New Delhi, India.
- Banerji, A. & Dutta, Bhaskar, 2009. "Local network externalities and market segmentation," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 605-614, September.
- Banerji, A & Dutta, Bhaskar, 2005. "Local Network Externalities and Market Segmentation," The Warwick Economics Research Paper Series (TWERPS) 725, University of Warwick, Department of Economics.
- Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
- Cowan Robin & Jonard Nicolas, 2000.
"The Dynamics of Collective Invention,"
018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- Andrea Morrison, 2008.
"Gatekeepers of Knowledge within Industrial Districts: Who They Are, How They Interact,"
Taylor & Francis Journals, vol. 42(6), pages 817-835.
- Andrea Morrison, 2004. "Gatekeepers of knowledge within industrial districts:who they are, how they interact," KITeS Working Papers 163, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2004.
- Rabik Ar Chatterjee & Jehoshua Eliashberg, 1990. "The Innovation Diffusion Process in a Heterogeneous Population: A Micromodeling Approach," Management Science, INFORMS, vol. 36(9), pages 1057-1079, September.
- Geroski, P. A., 2000.
"Models of technology diffusion,"
Elsevier, vol. 29(4-5), pages 603-625, April.
- Frank M. Bass, 2004. "Comments on "A New Product Growth for Model Consumer Durables The Bass Model"," Management Science, INFORMS, vol. 50(12_supple), pages 1833-1840, December.
- Jean-Michel Dalle, 1997. "Heterogeneity vs. externalities in technological competition: A tale of possible technological landscapes," Journal of Evolutionary Economics, Springer, vol. 7(4), pages 395-413.
- Uchida, Makoto & Shirayama, Susumu, 2008. "Influence of a network structure on the network effect in the communication service market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(21), pages 5303-5310.
- H. Peyton Young, 2009. "Innovation Diffusion in Heterogeneous Populations: Contagion, Social Influence, and Social Learning," American Economic Review, American Economic Association, vol. 99(5), pages 1899-1924, December.
- Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406.
- Koen Frenken & Gerald Silverberg & Marco Valente, 2008.
"A Percolation Model of the Product Lifecycle,"
DRUID Working Papers
08-20, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Arenas, Alex & Diaz-Guilera, Albert & Perez, Conrad J. & Vega-Redondo, Fernando, 2002.
"Self-organized criticality in evolutionary systems with local interaction,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 26(12), pages 2115-2142, October.
- Albert Díaz-Guilera & Alex Arenas Moreno & Conrad J. Pérez Vicente & Fernando Vega Redondo, 2000. "Self-Organized Criticality In Evolutionary Systems With Local Interaction," Working Papers. Serie AD 2000-30, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
- Delre, S.A. & Jager, W. & Bijmolt, T.H.A. & Janssen, M.A., 2007. "Targeting and timing promotional activities: An agent-based model for the takeoff of new products," Journal of Business Research, Elsevier, vol. 60(8), pages 826-835, August.
- Martin Hohnisch & Sabine Pittnauer & Dietrich Stauffer, 2008. "A percolation-based model explaining delayed takeoff in new-product diffusion," Industrial and Corporate Change, Oxford University Press, vol. 17(5), pages 1001-1017, October.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Krishnamurthy, Sandeep, 2003. "A managerial overview of open source software," Business Horizons, Elsevier, vol. 46(5), pages 47-56.
- Goyal, Sanjeev & Janssen, Maarten C. W., 1997. "Non-Exclusive Conventions and Social Coordination," Journal of Economic Theory, Elsevier, vol. 77(1), pages 34-57, November.
- Cecere, Grazia & Corrocher, Nicoletta, 2011. "The intensity of VoIP usage in Great Britain: Users' characteristics and firms' strategies," Telecommunications Policy, Elsevier, vol. 35(6), pages 522-531, July.
- Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096.
- Eocman Lee & Jeho Lee & Jongseok Lee, 2006. "Reconsideration of the Winner-Take-All Hypothesis: Complex Networks and Local Bias," Management Science, INFORMS, vol. 52(12), pages 1838-1848, December.
- Albert C. Bemmaor & Janghyuk Lee, 2002. "The Impact of Heterogeneity and Ill-Conditioning on Diffusion Model Parameter Estimates," Marketing Science, INFORMS, vol. 21(2), pages 209-220, November.
- Yann Bramoullé & Rachel Kranton, 2007. "Risk Sharing Across Communities," American Economic Review, American Economic Association, vol. 97(2), pages 70-74, May.
- John H. Miller & Robin Cowan, 1998. "Technological standards with local externalities and decentralized behaviour," Journal of Evolutionary Economics, Springer, vol. 8(3), pages 285-296.
- Swann, G. M. Peter, 2002. "The functional form of network effects," Information Economics and Policy, Elsevier, vol. 14(3), pages 417-429, September.
When requesting a correction, please mention this item's handle: RePEc:spr:jeicoo:v:7:y:2012:i:2:p:145-165. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.